1. 1 Wisconsin Veterans Homes Legislative Audit Bureau March 2011

2. 2 Areas of Review u Admissions policies and resident services u Revenues and expenditures u Staffing levels and compliance with state and federal regulations for nursing staff u Administration of the Aid to Indigent Veterans program u Purchasing procedures

3. 3 Facilities Operated by DVA u The home at King opened in 1887. u The home at Union Grove opened in 2001 to provide assisted living care, and it expanded in 2006 to include skilled nursing care. u A new 72-bed nursing facility is scheduled to open in Chippewa Falls in November 2012.

4. 4 Occupancy Trends

5. 5 Veterans Home Funding Sources u State and federal Medical Assistance payments u Payments by residents at private pay rates u Federal per diem payments for all residents who are veterans u Federal Medicare payments at Union Grove only u Federal funding for veterans with service- connected disabilities

6. 6 Operating Expenditures u Salaries and fringe benefits accounted for $65.7 million (73 percent) of FY 2008-09 expenditures. u Expenditures increased from $54.6 million in FY 2004-05 to $89.7 million in FY 2008 ‑ 09. u Expenditures have exceeded revenues in four of the past five fiscal years. u A one-time $20.1 million Medical Assistance reimbursement rate adjustment made in FY 2005-06 has helped the homes remain solvent.

7. 7 Compliance with Federal and State Nursing Requirements u Nursing positions account for more than one- half of all permanent positions. u The homes met or exceeded federal and state requirements for the provision of nursing care.

8. 8 Expenditures for Additional Nursing Time

9. 9 Overtime and Position Cost Comparison for Nursing Staff

10. 10 Full-time Nursing Staff Retention Rates

11. 11 Stipend Programs for Nurses u To help recruit and retain nursing staff, King established two stipend programs. u 57 nursing students participated from FY 2004-05 through FY 2008-09. u Expenditures totaled approximately $300,000, excluding participant wages.

12. 12 Inspections of Veterans Homes u The homes are subject to annual, unannounced inspections. u From 2005 through 2009, the number of citations the homes received was comparable to the statewide average. u Noncompliance with life safety codes was the most common type of citation. u King was issued one citation for substandard quality of care. u The homes responded to the citations they received.

13. 13 Aid to Indigent Veterans Program u The program provides financial assistance to help fund the cost of assisted living care at Union Grove. u The program was initially funded with segregated revenue from the Veterans Trust Fund. u GPR was added in the 2007-09 biennium, and Trust Fund revenue was replaced by program revenue from the homes’ operating appropriation. u The budget grew from $208,700 in FY 2005-06 to $406,700 in FY 2010-11.

14. 14 Concerns with the Aid to Indigent Veterans Program u The program was created in June 2005, but formal policies were not developed until May 2008. u In four cases, participants’ assets appeared to have exceeded the $2,000 eligibility limit. u One participant reported $386,000 in an irrevocable trust that was later found to be revocable.

15. 15 Purchasing and Contracting u In FY 2008-09, the homes purchased $17.0 million in goods and services. u We found violations of purchasing requirements for 26 of 79 purchases we reviewed. u There were four types of violations: –Split purchasing –Misapplication of bidding procedures –Inadequate bid solicitation –Failure to rebid contracts

16. 16 Oversight and Accountability u Ambiguous policies and inadequate oversight have led to significant financial and program management concerns. u King used $50,000 appropriated for nursing education as unrestricted donations to Fox Valley Technical College. u Numerous administrative changes have raised concerns about stability and continuity of agency leadership. u Personnel problems related to the veterans homes are long-standing. u Since at least 2006, DVA has planned to develop a comprehensive long-term financial plan for the homes but has not done so.

17. 17 Audit Recommendations u We include several recommendations for DVA, including reporting to the Joint Legislative Audit Committee by July 1 on the specific steps it has taken to respond to our recommendations.

18. 18 Wisconsin Veterans Homes Legislative Audit Bureau March 2011